RBI Declines to Disclose Data on Old Currency Deposits, For Now

Actual estimated amount of currency deposited needs to be reconciled to eliminate accounting errors: RBI

The RBI headquarters in Mumbai. (Photo: Reuters)

The Reserve Bank of India (RBI) on Thursday said that it will release data on deposits of Specified Bank Notes (SBNs) after reconciling the accounting entries with physical cash balances. The central bank’s clarification follows a series of reports which suggest that all the cash that was demonetised has been returned to banks via deposits.

On Wednesday, Bloomberg reported that banks have received Rs 14.97 lakh crore in old notes as of 30 December, citing people familiar with the matter. The government’s decision to withdraw old Rs 500 and Rs 1,000 notes had led to the scrapping of Rs 15.4 lakh crore in currency.

At the time, the estimate was that about 25 percent of this will not return to the banks. This may have been due to an assumption that unaccounted money or black money may not return to the banking system. Those expectations have been belied by reports that most of this currency has been deposited.

The RBI, however, noted that these estimates may not be reliable.

Now that the Scheme has come to an end on 30 December 2016, estimated figures would need to be reconciled with the physical cash balance to eliminate accounting errors/possible double counts etc.

Reserve Bank of India Press Release

The RBI added that till this process is completed, any estimate of the actual amount of scrapped currency deposited may not be reliable.

“RBI is taking all steps to complete the process expeditiously so as to release firm figures of SBNs received at an early date,” it said.

The value of notes returned may also be of relevance to the government’s finances. Last week, the government passed an ordinance which would eventually extinguish the notes that are not returned. This may allow the central bank to reduce the liabilities on its balance sheet and transfer a special dividend to the government.